Due Diligence - Effect of Supply Chain regulation: Data-based results on the effects of the German Supply Chain Act

February 8, 2024

After the agreement of the European Parliament and the Council of the EU in December 2023, a few formal steps remain to introduce the Corporate Sustainability Due Diligence Directive (CSDDD).

The legislation is intended to improve environmental and labor standards along the chain of international activities of European companies. However, the scope is far-reaching, and its implementation will be associated with significant costs of compliance. Thus, the directive will not only deteriorate the competitiveness of European companies but also endanger the economic development of developing and emerging economies because their attractiveness as suppliers of intermediate or final products for the European market will significantly decrease.